Although I didn't see the John Stossel report, I think the idea that American schools are largely failing is a myth. Of course you could provide cross cultural data that says the Chinese are scoring better in mathematics or something like that, but those comparisons are rather odious because it assumes that a factory floor model of education is actually of benefit to kids because of test scores.
The question is, if American schools are failing, whose kids are they failing.
A higher percentage of students graduate from High School than ever before with almost one quarter of the population holding a bachelors degree. If anything we are overeducated for much of the work that needs to be done in an America which is swithching to the service sector.
Most people are satisfied with the quality of the schools they send their children to, and probably the best guarantee that your child does well in school is that a parent takes an active interest.
Having said all that, see what would happen in most schools if you required a 90 average to participate in team sports in high school. The parents would flip out!
It is more likely that school boards and parents are standing in the way of a decent education (parents and school boards most often prove to be more anti-intellectual than teachers, and are the ones that set standards).
If public schools are failing, how are they failing? or how do you quantify such a thing?